The decision has been rendered, and the Federal Reserve once again has cut interest rates. The central bank's Federal Open Market Committee (FOMC) lowered its benchmark fed funds rate by 25 basis points to 2%. The FOMC also took down the discount rate by 25 basis points.
As you can see from the chart to the left of the S&P 500, the market now has barely breached the psychologically significant 1,400 mark. If we can stay above this mark and build a base above 1,400, we may be looking at an extended rally.
If, however, the market fails to move substantially higher from here, it is hard to see just what the short-term positive catalysts could do to push stocks much higher now that the Fed is done cutting rates and therefore out of the way.
The same applies to the Nasdaq, with a bit more strength and conviction than the S&P 500 or the Dow Jones.
With stocks like Google, Apple among some others, posting huge gains which helps the technology driven market.
The magic line in the sand here is around 2450. Again, if we can move higher from here and stay there for a while, we're in for more upside. If we retrace back below, look for further deterioration.
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